Programmatic Transactions to Account for $21 Billion in Global Spending This Year

Pressure to Reduce Transaction Costs for Buyers and Sellers

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Ad inventory bought and sold through automated methods, broadly known as programmatic advertising, will rise more than 50% this year to $21 billion worldwide, according to a new forecast by Magna Global, the digital media buying arm of Interpublic's Mediabrands.

The U.S. is leading global adoption of programmatic methods and will represent about half of programmatic transactions this year, according to Magna Global. A sizable portion of digital media spending is now transacted through programmatic technology, however, in each of the 35 countries analyzed in Magna Global's forecast.

Growth is expected to remain strong for the next four years, with an average annual growth rate of 27%, reaching an annual total of $53 billion in 2018, Magna predicted.

Magna linked the growth of programmatic to the pressure to reduce transaction costs, the chance to make more of marketers' data on consumers and the ability to sell "a broader spectrum" of digital media.

And if the past 18 months are any indication, marketers will only continue to adopt the buying methods. Both large ad categories such as consumer packaged goods and automotive as well as direct-response areas such as real estate and gaming are among the top adopters of programmatic, the report said.

Globally, almost half of the transactions this year will occur through real-time-bidding methods. Banner display ads will continue to dominate as the type of inventory most often bought programmatically.

In the U.S., programmatic transactions will represent 62% of display-related digital dollars this year. Globally, they'll grow to 42%.

Among the formats analyzed, social inventory is already predominantly traded programmatically, the report found.

The group predicted that by 2018, only the most premium digital inventory, including sponsorship and full-episode video, among other non-standard formats, will still be transacted through traditional means.